Massachusetts-based Allmerica Financial Corp., whose name and NYSE ticker symbol will change to “The Hanover Insurance Group Inc.” and “THG,” respectively, effective Dec. 1, 2005, announced estimated gross pre-tax catastrophe losses of approximately $5 million related to Hurricane Wilma.
The company expects to cede all Hurricane Wilma losses to reinsurers, subject to a 10 percent co-participation, since year-to-date catastrophe losses eligible for reinsurance have exceeded the retention limit in the company’s property catastrophe aggregate reinsurance treaty. This reduces the company’s pre-tax estimated loss impact from Hurricane Wilma to approximately $0.5 million, net of reinsurance.
The company’s property catastrophe aggregate reinsurance treaty protects against multiple catastrophes within the 2005 calendar year. The treaty provides $50 million of reinsurance coverage in excess of cumulative losses in the year of approximately $80 million. For purposes of determining the $80 million retention, individual events are capped at $30 million. The company retains 10% of the risk on the $50 million coverage.
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